The role of informal microfinance institutions in saving

2.2.10.7: THE CHALLENGES FACING THE EAST AFRICA SACCOs
The challenges facing the SACCOs are not the same in Kenya and Tanzania due to the
differences of stage in development in these two countries.
In Kenya, the main challenges are:-
� Market liberalization: The SACCOs are linked closely to the marketing systems of the
coffee cooperatives and the tea development office. But the liberalization of the market
for agricultural products is leading to the weakening those markets deals with export
products.
� Recent acceleration in the growth of the largest SACCOs which needs to revise their
internal organization their management styles their tools and their approach to staff
training.
� Several SACCOs have started collecting savings from the public and providing banking
services in the absence of a well-define legal or regulatory framework or a deposit
insurance fund.
The main challenges facing the financial SACCOs in the coming year are as follows:-
� Organization development
The SACCOs need to expand their membership to include other economically active
groups beyond their current base which focuses a commodity.
� Operational Development
New products will have to be developed to meet the demand of formers in a free
market environment, as well as the demand from a category of client that has been
neglected thus permanently women
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